From Billable Hours to Retainers: The Ultimate Guide to Outsourcing Your Marketing

So, you've made the decision to outsource your small business or nonprofit's marketing efforts. How do you prepare for the first meeting so you know what to expect? Just like buying or selling your first house, working with a marketing professional requires preparation and understanding to ensure a successful partnership. While the consultant will provide guidance throughout the process, it's important to conduct research and familiarize yourself with certain aspects beforehand.

Marketing consultants may have different approaches to structuring their work, but there are three common models you are likely to come across: billable hours, project-based, and retainer. Whether you have a proposal in front of you or are meeting a marketing agency for the first time, this guide will equip you with the knowledge you need to approach the situation with confidence.

Model 1: Billable Hours

Billable hours is a payment structure where the marketing consultant charges based on the time they spent working on a project. When working with a consultant on an hourly basis, consider these factors:

+ Get what you pay for: With billable hours, you have a clear understanding of the time spent on your project and the associated costs. This transparency ensures you receive the services you've paid for.

+ Cost control: The billable hours model gives clients the flexibility to set budget limits and avoid unexpected expenses. This is particularly useful for small businesses or nonprofits with limited financial flexibility.

- Potential for inconsistencies: Working on an hourly basis can sometimes lead to inconsistencies in project outcomes, especially if there is a lack of communication or if expectations are not clearly defined. However, this can be reduced through effective project management and regular communication with your consultant.

At our agency, we generally avoid billable hours because we believe it does not provide the optimal benefit to our clients. However, it can still be a practical option based on your organization’s needs and circumstances. If you’re considering this model, be sure to discuss estimated hours with your consultant to ensure a common understanding and gain context for the future.

Model 2: Project-Based

The project-based model is another option where the consultant charges a flat rate based on the estimated hours needed to complete a specific project. Here are the advantages for clients seeking one-time solutions:

+ Transparent flat-rate pricing: Project-based engagements provide the exact cost upfront, allowing your small business or nonprofit to plan and allocate budget accordingly. This helps you avoid unexpected marketing expenses and manage your finances more efficiently. Marketing consultants also love this model because it helps with income projections.

+ Flexibility with final costs: While project rates may seem like they are set in stone, when you develop a great relationship with a marketing consultant, they will often work with you on costs. At Evergreen, we determine our project rates using many factors, but the number of hours we “think” it will take us to complete the project plays the biggest role. Sometimes we underestimate and sometimes we overestimate. An ethical marketing consultant may adjust the final cost if the project required a drastic number of fewer hours than initially estimated. This fairness and flexibility enhance client satisfaction and build trust between you and the consultant.

+ Insight for future projects: By discussing estimated hours for a project, you gain valuable context for similar endeavors in the future. This information enables better planning and decision-making when collaborating with marketing consultants.

Let's take a look at how the project-based model can bring real benefits. In the fall of 2022, we worked with Indiana Afterschool Network (IAN) on developing content and populating their new website. . This single, one-time project played a pivotal role in their marketing strategy, serving as a powerful tool to engage their target audience, and communicate their mission effectively. The project ran so smoothly, we were able to decrease the final project cost because it took drastically less amount of hours than we initially expected allowing our nonprofit client to put money back into their mission.

Model 3: Retainer

Lastly, retainer engagements involve an ongoing partnership where the consultant provides consistent monthly support. Retainers are an excellent option for clients in need of continuous assistance and strategic guidance. Here are some things to think about:

+ Support for clients with limited resources: Retainers work best for small businesses or nonprofits lacking an in-house marketing department or with limited internal resources. This arrangement offers consistent month-to-month marketing support so you can spend more time focusing on your organization.

+ Predictable budget allocation: Retainers are a fantastic way to bring stability to your marketing budget. By providing a fixed monthly cost, they allow you to plan and allocate your marketing expenses with ease. This predictability helps you avoid any unwelcome surprises or unexpected financial burdens that can throw off your budget.

+ Priority and consistency: Retainer clients often receive priority treatment, ensuring their projects get immediate attention. This prioritization is beneficial, particularly during busy seasons or when timeliness is crucial.

While the retainer model offers various benefits, it’s important to note that ongoing effort is required from both the agency and the client to ensure the relationship remains effective and the strategy stays current. In other words, a retainer can easily get stale if you're not proactively developing a holistic strategy and sticking to it.

If you would like further guidance on how to outsource your marketing efforts, schedule a discovery call with Evergreen Strategic Communications here.